CAPTCHA, for those of you just joining us, stands for Completely Automated Public Turing test to tell Computers and Humans Apart. Essentially, it’s a challenge-response test used to distinguish between humans and spam-spewing robots. What’s interesting about reCAPTCHA’s implementation is that it’s used for digitizing books.

“Since computers have trouble reading squiggly words like these, CAPTCHAs are designed to allow humans in but prevent malicious programs from scalping tickets or obtain millions of email accounts for spamming,” Google explains in a post to the company blog. “But there’s a twist–the words in many of the CAPTCHAs provided by reCAPTCHA come from scanned archival newspapers and old books. Computers find it hard to recognize these words because the ink and paper have degraded over time, but by typing them in as a CAPTCHA, crowds teach computers to read the scanned text.”

An ingenious idea, crowdsourcing book transcriptions in this way. An effective one too: reCAPTCHA boasts 99.5 percent accuracy at the word level.

Little wonder, then, that Google (GOOG) has acquired it. The company can clearly put reCaptcha’s technology to good use, not just as a security measure, but as a means of improving its own massive book-scanning project.

CAPTCHA, for those of you just joining us, stands for Completely Automated Public Turing test to tell Computers and Humans Apart. Essentially, it’s a challenge-response test used to distinguish between humans and spam-spewing robots. What’s interesting about reCAPTCHA’s implementation is that it’s used for digitizing books.

“Since computers have trouble reading squiggly words like these, CAPTCHAs are designed to allow humans in but prevent malicious programs from scalping tickets or obtain millions of email accounts for spamming,” Google explains in a post to the company blog. “But there’s a twist–the words in many of the CAPTCHAs provided by reCAPTCHA come from scanned archival newspapers and old books. Computers find it hard to recognize these words because the ink and paper have degraded over time, but by typing them in as a CAPTCHA, crowds teach computers to read the scanned text.”

An ingenious idea, crowdsourcing book transcriptions in this way. An effective one too: reCAPTCHA boasts 99.5 percent accuracy at the word level.

Little wonder, then, that Google (GOOG) has acquired it. The company can clearly put reCaptcha’s technology to good use, not just as a security measure, but as a means of improving its own massive book-scanning project.

Sources briefed on the matter say DOJ attorneys have contacted Google (GOOG) as well as the Association of American Publishers and the Authors Guild about the antitrust implications of the agreement. Presumably at issue here are concerns over the settlement’s opt-out terms–authors and publishers who don’t opt out have effectively opted in–and the fate of orphan works, books still in copyright but whose copyright owners are unknown.

Orphan works number in the millions and the fear is that this settlement gives Google a powerful blanket license for them. As Pamela Samuelson, director of the Berkeley Center for Law & Technology, recently noted:

An estimated 70 per cent of the books in the Book Search repository are in-copyright, but out of print. Most of them are, for all practical purposes, “orphan works,” that is, works for which it is virtually impossible to locate the appropriate rights holders to ask for permission to digitize them….The proposed settlement agreement would give Google a monopoly on the largest digital library of books in the world….Google will also be the only service lawfully able to sell orphan books and monetize them through subscriptions….Virtually the only way that Amazon.com, Microsoft, Yahoo!, or the Open Content Alliance could get a comparably broad license as the settlement would give Google would be by starting its own project to scan books. The scanner might then be sued for copyright infringement, as Google was. It would be very costly and very risky to litigate a fair use claim to final judgment given how high copyright damages can be (up to $150,000 per infringed work). Chances are also slim that the plaintiffs in such a lawsuit would be willing or able to settle on equivalent or even similar terms.

Samuelson concludes that the Book Search agreement as written is essentially a major restructuring of the book industry and an anticompetitive one at that. If that is indeed the case–and Google maintains that it is not–it’s worrisome indeed. Certainly, it’s reason enough for the DOJ to give the agreement a good once-over.

Sources briefed on the matter say DOJ attorneys have contacted Google (GOOG) as well as the Association of American Publishers and the Authors Guild about the antitrust implications of the agreement. Presumably at issue here are concerns over the settlement’s opt-out terms–authors and publishers who don’t opt out have effectively opted in–and the fate of orphan works, books still in copyright but whose copyright owners are unknown.

Orphan works number in the millions and the fear is that this settlement gives Google a powerful blanket license for them. As Pamela Samuelson, director of the Berkeley Center for Law & Technology, recently noted:

An estimated 70 per cent of the books in the Book Search repository are in-copyright, but out of print. Most of them are, for all practical purposes, “orphan works,” that is, works for which it is virtually impossible to locate the appropriate rights holders to ask for permission to digitize them….The proposed settlement agreement would give Google a monopoly on the largest digital library of books in the world….Google will also be the only service lawfully able to sell orphan books and monetize them through subscriptions….Virtually the only way that Amazon.com, Microsoft, Yahoo!, or the Open Content Alliance could get a comparably broad license as the settlement would give Google would be by starting its own project to scan books. The scanner might then be sued for copyright infringement, as Google was. It would be very costly and very risky to litigate a fair use claim to final judgment given how high copyright damages can be (up to $150,000 per infringed work). Chances are also slim that the plaintiffs in such a lawsuit would be willing or able to settle on equivalent or even similar terms.

Samuelson concludes that the Book Search agreement as written is essentially a major restructuring of the book industry and an anticompetitive one at that. If that is indeed the case–and Google maintains that it is not–it’s worrisome indeed. Certainly, it’s reason enough for the DOJ to give the agreement a good once-over.